Month: February 2008

Microsoft/Yahoo! privacy & merger watch: Yahoo! is "largest behavioral targeting network" according to its Blue Lithium subsidiary

Yesterday, the behavioral targeting firm and Yahoo! subsidiary Blue Lithium gave a lunch time presentation at the OMMA Behavioral Targeting conference. The Yahoo!/Blue Lithium representatives discussed how “Yahoo! was the largest behavioral targeting network,” even prior to its acquisition of Blue Lithium. They talked about the “amount of knowledge we have about users,” including the “deep information” on its “hundreds of millions” of users. Yahoo!, they claimed, had a treasure trove of user data for its targeting “engine,” including search clicks, page views, ad views, and clicks. Yahoo!, they explained, “has spent time and money” to build an ad targeting system that can use all this data, with 400 distinct “categories and models.” Yahoo! has “scale” and “unprecedented reach.” They made a point of noting that [for now], Google doesn’t use behavioral targeting. The representatives also boosted about Blue Lithium’s retargeting capabilities, and that they can target with “specific messages,” and “identify the people that clicked.”  The retargeting is followed up with a “call to action” they noted.

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Microsoft/Yahoo! combination would create a "dominant player in display ads"

From the UK’s New Media Age online ad trade (excerpt). It underscorses for us the failure of regulators to address both the competition and privacy issues (let alone consequences for digital media content diversity): “A merger in the wake of Microsoft’s proposed $44.6bn (£22.7bn) takeover, could create a dominant display provider to match Google’s dominance of the search market…A combined Microsoft-Yahoo! could reach as much as 81.5% of the total worldwide audience…

“I think it would consolidate a position as the dominant leader in display advertising, in the same way that Google is the head-and-shoulders leader in search’ [said Caroline McGuckian, global head of media at LBi.]…Media agencies have largely welcomed the takeover as a boost to the display ad market, particularly behavioural targeting. It’s also seen as bringing welcome competition to Google’s dominance of online.”

source: “Microsoft-Yahoo! Would Be Display Ad Leader.” Danielle Long. NMA. 07.02.08 [sub. required]/

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Google & Microsoft’s Antitrust Teams: the Digitally Well-Connected

Who will represent the interests of the public as Google and Microsoft (and others) scoop up large chunks of the digital eco-system? Here’s an excerpt from Legal Times [“Microsoft Lawyers Map out the Bid for Yahoo.” Feb. 11, 2008. reg. required] on the former federal antitrust officials working for Google and Microsoft:


“Google does have a team of veterans representing its interests in the Yahoo bid. David Gelfand, a Washington antitrust partner at Cleary Gottlieb, and Susan Creighton, Washington antitrust co-chair at Wilson Sonsini, both helped Google get its merger with DoubleClick past federal regulators at the Federal Trade Commission last year. And Creighton was director of the Bureau of Competition at the FTC before joining Wilson Sonsini in 2006.

Microsoft, too, has a connected advocate in [Charles] Rule. When he goes to the Justice Department, he won’t need introductions. Rule worked with Thomas Barnett, the head of the Antitrust Division, while the two were partners at Covington & Burling. Rule has also worked with Barnett’s deputies. David Meyer, now deputy assistant attorney general for civil enforcement, served as Rule’s special assistant in the Antitrust Division in the late ’80s and then worked with him at Covington. (Skadden partners Michael Weiner in New York and James Venit in Brussels, are representing Yahoo on antitrust matters.)”

Microsoft’s quest for Yahoo!—Follow (Your!) Data…or Hi, Ho, Hi, Ho, it’s off to harvest your data we go

We will be covering the proposed takeover, from both the online advertising business and privacy side. Here’s a revealing tidbit from BusinessWeek on what Microsoft hopes to achieve from a deal: “What’s more, the company is hoping to bring together Yahoo’s research and development staff, who’ve done innovative work in online advertising auction theory and data-mining, with its own online lab.”

Yes, a key to analyzing this deal–if it happens–is what are the consequences when Microsoft’s adCenter merges with Yahoo!’s Panama and other data mining assets. That’s why it’s important to keep a spotlight on what Google and Microsoft, among others, plan to do. Here’s an example of where we are headed, courtesy of Microsoft’s adLab demonstration this week [via Clickz]: “Online advertising has been centered around keywords for too long,” said Tarek Najm, an engineer for Microsoft’s advertising and business intelligence systems, adding the “next wave of advertising is going to use new algorithms and technologies” that display ads based on consumer intent.”

Nielsen Tracks Your Brain to Boost Ads, Programming….Get ready for a neuroscience designed "sweeps" period!

The formulation for interactive marketing includes personalized data collection, content creation utilizing immersive multimedia, and targeting across platforms and applications. Part of the ad industry’s quest to perfect engagement as a metric includes incorporating advances in neuroscience. So it’s not surprising that the folks that give us the TV ratings (and more), is making moves to utilize brain research. Here’s an excerpt from Katy Bachman’s Adweek article [Feb. 7, 2007].

“… Nielsen Co.’s announcement today that it has made a strategic investment in NeuroFocus, a firm that specializes in applying brainwave research to advertising, programming and messaging…

The two companies will work together to develop new forms of measurement and metrics based on the latest advances in neurosciences…

“This alliance will enable us to gather truly unique insights about consumers’ attitudes and behavior about which they themselves may not even be fully aware and will complement our other measures of consumer behavior,” said Susan Whiting, evp at Nielsen.

Initially, the alliance will focus on bringing to market new science-based products, services and metrics to clients in consumer packaged goods, television, film and emerging media. Nielsen also intends to use NeuroFocus’ techniques, as part of Nielsen’s Digital Labs research centers, to better understand consumer engagement.”

****

More about NeuroFocus from its website:

“NeuroFocus, Inc. is an innovative company applying the latest advances in neuroscience to the world of advertising and messaging. Leveraging a rapidly growing body of research and insights into how the human brain processes stimuli like ads, messages, and products, we are able to track millisecond-by-millisecond brain responses to messaging.

Our breakthrough techniques utilize advances in measuring attention challenges, emotional engagement, and memory/retention to measure the effectiveness of advertising. Our measurements are precise, unambiguous, and repeatable.”

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Microsoft’s Digital Ad Vision: Part 2

From this week’s Microsoft’s “Strategic Update [Feb. 4, 2008]. Excerpt:

“Advertising is a key part of a number of the opportunities that I talked about, and the key probably right now for us to continue to grow our advertising footprint starts with what we’re doing with search and portal. We have made good progress in that business. It is growing. Since our start four years ago, we now have what I would call a very credible search product, a very credible advertising platform. We’ve got good trajectory. This was, in some senses, the best time for us to ask ourselves, what else can we do to make ourselves even more effective in this business?
And in a sense, the fact that we’re in a stronger position now than we were 12 months ago actually makes this an easier acquisition to consider, even though, as I said in my letter to Jerry Yang, we did have discussions a year ago with Yahoo! about combining the businesses. People say, what are you doing here? Well, what we’re trying to do is take some momentum that we have and ask, how do we really increase that momentum even further? What else can we do?
And the truth is, either on our own efforts or, hopefully, now that we’ve proposed this acquisition, on our efforts merged together with Yahoo!, there are really four things we get a chance to work on. First and foremost is to expand our R&D capacity. We’re going to have to innovate like crazy to get the position want to have in this market. We’re going to have to innovate in the ad platform. We’re going to have to innovate in core search. We’re going to have to invest in new, emerging user experiences —mobile, social media, video, entertainment experience. We need the R&D capability to really compete with the market leader.
We continue to hire people and transfer people. But in fact, bringing together Microsoft and Yahoo! will allow us, because of the fantastic engineering talent both at Yahoo! and at Microsoft, we get more capacity more quickly. We get a chance to not have to think so much about how do we not use the capacity we have, but how do we deploy this incredible team to make sure that we’re doing everything and more that the market leader might be doing?”

Microsoft’s Digital Ad Goal: Anticipate…Consumer Behavior Faster than the Speed of Thought

Both Google and Microsoft are in a race to push the boundaries of digital advertising so they can better serve brands and marketers. Microsoft is now again in the spotlight because of its attempt to acquire Yahoo! In November 2006, my group CDD and the USPIRG filed a complaint at the FTC focused on threats to privacy and consumer welfare from digital advertising. We had a special focus on Microsoft and its adCenter work, and have kept an eye on the company every since (along with our watch on Google). Today, Microsoft’s adCenter Lab issued a press release summarizing some of its latest work to expand the capabilities of interactive advertising. Here is an excerpt to ponder:

“We believe the technical advances and intelligence we are creating at adCenter Labs can change the game of online advertising,” said Tarek Najm, technical fellow at Microsoft. “Solutions to today’s challenges must be capable of handling and understanding the complexity of vast amounts of data. To address that challenge, we are developing advertising algorithms that can anticipate and understand consumer behavior faster than the speed of thought, so that we can help advertisers create more efficient and relevant user experiences.”

Diane Mermigas is a trade reporter who has covered media and communications for a variety of publications. Here is a very insightful excerpt from her Feb. 5th, 2008 article:“…The ultimate irony is that Microsoft and Google are being driven by the same fear and greed: a penchant for market monopoly, a passion for manipulation and an obsession with losing a strategic advantage. Both companies understand that interactive advertising and commerce will provide the golden profit pipeline…Google…has a good chance of winning the ongoing bidding for wireless spectrum–a nearly $5 billion bet that it can make many times that managing user data, advertiser pitches and online transactions in its own branded space…Google CEO Eric Schmidt is openly taking aim at selling advertising and subsequent transactions on the world’s 3 billion mobile phones and other portable devices…If the deal goes through as expected, look for Google to ramp up its search-based personal data mining and marketing across all digital interactive platforms. It will bore deeper into tracking and reporting on users’ Web selections and activities. Auctioning premium connections with target consumers and mining the long tail of products and services is Google’s new advertising industry paradigm…”

from: Google v Microsoft: Fear and Loathing in Merger Land. Diane Mermigas. Mediapost.

Ad Age on some of the methods used with online advertising (inc. for Google & Microsoft)

from Abbey Klaassen’s 2.4.08 article on Microsoft’s proposed Yahoo! takeover, entitled “They’ll still be Chasing Google.” [excerpt]: “The merger could also provide advertisers with a broader suite of online ad offerings and allow them to better integrate their search ads with display, video and even in-game units. In theory, at least, the combination of those formats allows marketers to influence consumers’ opinions about a product or brand, create demand for that brand and fulfill or track that demand through a transaction such as a search. It also allows them to measure and attribute the value of the different types of ads consumers encounter on the path to a purchase — for example whether John Doe has seen a display ad, and is then prompted to search for the product advertised.”

We have long been worried about the failure of Google to candidly address the numerous policy issues involving its own growing dominance in the online ad market, especially the implications of the pending DoubleClick acquisition. Today, David Drummond, Google’s senior VP, posted a piece on the corporate policy blog on Microsoft’s attempted takeover of Yahoo! Mr. Drummond suggested that the “underlying principles of the Internet’s openness and innovation” were at stake if such a merger occurred.

But missing from the piece was any acknowledgment of Google’s own dominant role in interactive advertising; how it would be incorporating the client base and perspectives of the Fortune 1500 style users of DoubleClick’s data targeting/delivery system; its own aggressive plans to extend its market share in search to almost every other sector of the advertising and marketing business. In a glaring and telling omission, Mr. Drummond never used the “P” word–privacy. Because Google’s failure to seriously address the privacy implications of its own business practices–especially in the context of DoubleClick–is one of the most troubling and telling aspects about its future plans for the digital media.

Mr. Drummond does raise important questions that must be addressed as we review Microsoft’s plans for expansion, including the likely scenario of bundling operating system and desktop services with data collection and marketing. But Google should acknowledge that it was Microsoft that was the leading corporate opponent as it sought to win approval by the FTC of its DoubleClick deal. There’s a “tit for tat” quality to Mr. Drummond’s post. Mr. Drummond’s conveniently ignores the real question about preserving an open and innovative Internet. What happens to online publishing, diversity of expression, privacy, and innovation when we end up with only two mega giants–Google and Microsoft–in control of online advertising? And who both ultimately have the same data collection, micro-targeting across all platforms and applications, business model?